Reform of judicial review consultation – a response

In July 2015, the Ministry of Justice opened a consultation on provision of financial information to the court, on applications for judicial review or when applying for a costs capping order. The background to the consultation, which closes on 15 September, can be seen here. In this blog post, Maurice Sunkin and Varda Bondy share their response.

Varda Bondy and Professor Maurice Sunkin, September 2015

This is as joint response by Varda Bondy and Professor Maurice Sunkin.

The response principally considers the proposal to set a threshold of £1,500 above which financial information about a third party contributing funding for judicial reviews will have to be disclosed.

Section 85 of the Criminal Justice and Courts Act 2015 introduces a requirement for claimants to provide specified information concerning the funding for the judicial review proceedings before permission can be given. This is to be: ‘information about the source, nature and extent of financial resources available, or likely to be available, to the applicant to meet liabilities arising in connection with the application’.

The stated rationale of this requirement is: ‘to provide the court with a clear picture of the funding of a judicial review application, in order to inform decisions on costs’ (consultation para 22), i.e. to enable the court, under the existing rules, to make relevant non-party costs orders (orders against third parties).

Section 85 only requires third parties to provide this information where their financial support (direct or indirect) exceeds, or is likely to exceed a set level.

As is explained in paragraph 20 of the consultation before a court can make an order for costs against a third party case law requires that there be ‘a strong relationship between the party and the person who is funding their claim’ and that ‘doing no more than providing funding is insufficient’. The key point is that the third party ‘must be seeking to drive the litigation and to benefit from a potential remedy in the case’.

The consultation notes concerns that too low a threshold figure could have a chilling effect by deterring ‘small contributions made with no expectation of control of or benefit from the judicial review’ (para 24).

The government is of the view that a single threshold of £1,500 will ‘capture contributions which may be indicative of a degree of third party control of the claim, particularly in lower cost claims …without capturing small contributions made without any real expectation of creating a relationship of control (para 72).

A single threshold is arbitrary

A single threshold to cover all judicial reviews is inevitably arbitrary and may not provide a reliable indicator of whether third parties are likely to exercise control in particular cases.

That an arbitrary threshold may have a chilling effect on access to justice in judicial review cases is a matter of constitutional importance given that judicial review ‘can be characterised as the rule of law in action’(para 9).

Absence of sound evidence

If a single threshold is to be adopted that there must be confidence, based on the best evidence available: a) that the figure is high enough to avoid a chilling effect; and b) that figure will provide the court with a reliable indicator that third parties are likely to exercise control.

The proposed £1,500 threshold is said to have been ‘influenced by the data available on the costs of judicial reviews’. Reference is made to :

An estimate by the Public Law Project dating back to 2007 suggesting claimant costs of a straight forward case as being between £10,000 and £20,000, which after being adjusted for inflation would be around £11,000 to £22,000

A 2012 estimate by Guildhall Chambers suggesting claimant costs at £5,000 to £10,000 and

An estimate by Leigh Day Solicitors of unspecified date of upwards of £30,000 including defendant and claimant costs.

The government says that ’In the light of … data, such as the Guildhall Chambers’ figure of £5,000 as the bottom of the range, £1,500 appears an appropriately significant sum…’ (para 66) .

In our view this is a wholly inadequate basis for arriving at a threshold figure that could have an adverse effect on the enforcement of the rule of law; lead to the court being inundating with unhelpful documentation; and place a disproportionate and unnecessary burden on claimants.

As the consultation recognises the data relied on ‘is not particularly substantial or quality assured’ (para 69). In our view the data referred to, while of interest, does not provide a reliable guide to the true cost of judicial review litigation and is not a sufficient or adequate basis for this important reform.

Further empirical data on costs

The government asks for empirical evidence on the: ‘costs associated with engaging in the judicial review process, the burden that these requirements would place on claimants and information on costs awards in judicial review cases (question 14, p 27)’.

While the current proposal relates to privately funded cases, the cost of publicly funded judicial reviews would be a potential helpful starting point and reliable figures may be available from the Legal Aid Authority which has access to the most comprehensive dataset of litigation costs, albeit for legal aid cases.

The Nuffield Foundation funded study of the effect and value of judicial review conducted by the Public Law Project and a team led by Maurice Sunkin also provides some evidence relating to costs in both legally aided and privately funded cases.[1]

This study contains data on 502 judicial reviews that reached final hearing during a 20 month period from July 2010 to February 2012 inclusive. Questionnaires asked solicitors who acted for claimants about the level of costs in their cases, how cases were funded, and what orders was made in relation to costs. Responses were received from claimant solicitors in respect of 198 of the 502 cases.

As to the level of costs, they were asked to identify whether the cost of their case was less than £14,999, between £15,000 and £24,999, between £25,000 and £49,999, or greater than £50,000.

The table below sets out the level of costs incurred by claimants according to mode of funding (i.e. legal aid or private) in the 198 cases.

<£14,999

£15,000-£24,999

£25,000-£49,999

>£50,000

Total

N

Row %

N

Row %

N

Row %

N

Row %

N

Row %

Legal aid

34

24

43

31

40

28

24

17

141

100

Other source of funding

12

21

8

14

20

36

16

29

56

100

Total

46

23

51

26

60

31

40

20

197

100

Notes: All percentages rounded to nearest point.

It can be seen that a similar proportion of cases, around one-fifth, fell into the top and bottom bands, with slightly larger proportions (26% and 31%) falling in the middle bands.

It can also be seen that legally aided cases gave rise to lower costs than privately funded cases.

The figures show that in 21 per cent of privately funded cases the costs incurred by claimants were said to have been below £15,000 and in 79 per cent of the cases the costs incurred were said to have been £15,000 or above. In 29 per cent of the cases the costs were said to have been £50,000 or above.

The figures indicate the significant range of costs incurred by claimants in cases which went to final hearing. In so doing, they highlight the arbitrary nature of a single threshold. They also suggest that it would be inappropriate to base a threshold figure on a level of costs as low as £5,000 (see para 66).

In the light of our findings, and in particular that in nearly 80 per cent of judicial reviews claimants incurred costs of £15,000 or above, in our view the £1,500 is too low and cannot represent a reliable indication of the point at which third parties are likely to exercise a significant degree of control over claims. In our view it is more appropriate to calculate the threshold figure having regard to the likely costs of cases that go to full hearing rather than on the basis of the least costly matters that do not proceed beyond permission.

If the proposed threshold of £1,500 was arrived at having regard to the £5,000 estimate provided by Guildhall Chambers (ie approximately one third of this figure) our findings suggest that a more appropriate figure for the threshold should be one in the range £5,000 to £8,000.

We have no firm view on the relative benefits of using a percentage figure. While such a figure could be less arbitrary than a single threshold it would be significantly more complex and difficult to apply.

Cost benefit analysis

As well as empirical evidence relating costs, the consultation asks for empirical information relating to the burden that the proposed requirements would place on claimants and the equalities impacts on people with protected characteristics.

We have drawn attention to the costs data that we are aware of. In relation to equalities impacts we make the following observations: first, research that exists in relation to the matters raised by claimants in judicial review proceedings supports the view that reforms which limit access to judicial review are likely to have a disproportionate impact on those with protected characteristics (see para 119).

Second, however as yet there is no comprehensive data on the characteristics of claimants for judicial review or those who are likely to be directly affected by judicial review litigation. This would be extremely valuable information to have and we would welcome initiatives that would enable such data to be collected, analysed and made publicly available.

[1]Judicial Review: the nature of claims, their outcomes and consequences, V Bondy (Research Fellow, University of Essex), L Platt (Professor of Social Policy and Sociology, LSE), M Sunkin (Professor of Public Law and Socio Legal Studies, University of Essex) to be published October 2015